VietNamNet Bridge – The Vietnam Association of Financial
Investors (VAFI) has sent a document to the Prime Minister, suggesting
solutions to unfreeze the local property market, whereas economists said the
market should not be intervened in.
The document was also sent to
construction and finance ministers, governor of the central bank, the
governments of HCMC and Hanoi and State Capital Investment Corp. (SCIC).
Subsidy suggested
VAFI proposed the State set aside
VND8 trillion to subsidize interest rates in the next three years in order to
provide low- and middle-income home buyers with preferential lending rates.
For example, the buyer of a
VND2-billion house can access a lending rate of 7% for the first three years as
the State will subsidize 3-5% per year, said VAFI.
With VND8 trillion, the State
will attract an amount of some VND120 trillion, equivalent to 120,000 apartments,
the association estimated.
The second solution is that
localities, especially big cities, should establish their own low-cost
resettlement housing funds for the period from 2013 to 2020.
As property prices have dropped
sharply (by 30-60%), big localities should make plans to buy around 25,000
apartments worth some VND25 trillion, VAFI suggested.
It is possible to mobilize funds
to implement these plans. If localities tried their best, they could buy 10,000
apartments, said the association.
In addition, the financial
resources from SCIC and the enterprise reform fund run by SCIC would be enough
to buy 15,000 units.
Moreover, VAFI suggested
establishment of “property market rescue teams” on both central and local
levels.
VAFI came up with such
suggestions after senior officials of the Ministry of Finance, the Ministry of
Construction and the governments of Hanoi and some other localities had said
the State should rescue the property market.
Objection from economists
However, some economists deemed
property market rescue with an aim to revive the economy to be “very improper
in the current context”.
Nguyen Dinh Cung, vice president
of the Central Institute for Economic Management, said the State should not and
could not intervene to rescue the property market at present.
The main reason is financial
resources. Cung said: “The State can no longer save the real estate market
given the current problems in State budget collection.”
It is not fair to rescue those
creating the real estate bubble and making millions of citizens unable to
access housing products, he said.
“Saving them will arouse public
displeasure,” he stated.
Meanwhile, Tran Dinh Thien,
chairman of the Vietnam Institute of Economics, said realty firms must lower
prices to save themselves rather than leaning on the State’s help.
The current economic situation is
much more difficult than 2009, when the State announced to spend over US$8
billion to stimulate the economy, he remarked.
Sharing the view of Cung, Thien
said citizens would gain access to housing products if property prices were
further reduced.
“If the property market was
rescued but prices were not cut, then who would be saved? What would the
majority of citizens gain?” he wondered.
According to a research of Dragon
Capital, Hanoi and HCMC each has over 35,000 apartments on sale. If an apartment
was priced VND2 billion, the total amount stuck in the property market would be
VND140 trillion.
Without measures to stimulate
demand, it would take at least seven years to completely settle this volume of
unsold apartments, said Dragon Capital.
Source: SGT
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